Wednesday, March 7, 2007

EU threatens Microsoft with more fines

THE European Union has threatened Microsoft with further fines for continued breaches of competition rules, complaining it had failed to comply with a landmark 2004 European Commission antitrust ruling.

The EU says Microsoft has not provided competitors with adequate information and documentation on interoperability at reasonable prices for its work group server products.

Under a “Statement of Objections” issued by the EU on Thursday, the European Commission says its “preliminary view” was that there was no significant innovation in the interoperability information.

It also rejected as “unfounded” 1,500 pages of submissions Microsoft has made to the commission since December 2005, and therefore says the prices proposed by Microsoft are unreasonable.

Microsoft has been given four weeks to reply to the Statement of Objection, or risks further fines – up to five per cent of daily turnover for the period from when the original 2004 rulings were made.

“Microsoft has agreed that the main basis for pricing should be whether its protocols are innovative,” EU competition commissioner Neelie Kroes said.

“The Commission's current view is that there is no significant innovation in these protocols. I am therefore again obliged to take formal measures to ensure that Microsoft complies with its obligations,” Mr Kroes said.

In its original action, the EU had been especially concerned that open source server makers had access to interoperability information to ensure their products worked seamlessly with Microsoft server products.

Microsoft is challenging the 2004 antitrust ruling of the EU’s Court of First Instance in which it was fined A$835 million (Euro497 million). The company was fined a further A$471 million (Euro280.5 million) in the middle of last year for not providing the “complete and accurate” interoperability information as required in the original ruling.

Microsoft has four weeks to respond to the Statement of Objections, after which time the EU will make a decision whether to again fine the company.

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